The Internal Revenue Service has stepped up its efforts to investigate possible misconduct in the municipal bond sector, more than doubling the number of examinations it conducts per year.

A new report by the Treasury Inspector General for Tax Administration found that the IRS's Tax Exempt Bonds Office's enforcement activities examination program has dramatically increased its coverage of the municipal bond sector by conducting more examinations from fiscal year 2005 to fiscal year 2010. However, the IRS's TEB office has minimal information to select municipal bonds for examination and continues to use its limited resources examining compliant bonds.

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